UPDATE 1-Amazon to offer cheaper Kindle, sponsored by AT&T

NEW YORK, July 13 (Reuters) - Amazon.com Inc (AMZN.O: Quote) said
on Wednesday it has struck a sponsorship deal with AT&T Inc
(T.N: Quote) to sell a less expensive version of its Kindle 3G digital
reader.

Amazon's Kindle 3G, which allows users to buy electronic
books without having to subscribe to a wireless network, costs
$189. The AT&T sponsored device, which will also include
built-in ads on its screensavers, will cost $139.

Amazon in April introduced built-in advertising from
companies such as General Motors Co's (GM.N: Quote) Buick, Procter &
Gamble Co's (PG.N: Quote) Olay, and Visa Inc (V.N: Quote), on a different
version of the Kindle, which competes with devices such as
Barnes & Noble Inc's (BKS.N: Quote) Nook and Apple Inc's (AAPL.O: Quote) iPad
tablet.
(Reporting by Phil Wahba, editing by Gerald E. McCormick)